Michael Charapp had an important message for fellow dealer attorneys who attended the recent Kindred-line member Crowe Horwath seminar: Don’t assume that regulatory enforcement has disappeared or diminished under the Trump administration!
“Federal agencies do not die, they simply face political reform,” said Charapp, a WANADA Kindred-line member and partner at Charapp and Weiss, LLP. Even at the Consumer Financial Protection Bureau (CFPB), where Acting Director Mick Mulvaney has made changes, such as no budget for second quarter of 2018, reform will be incremental, Charapp said.
“Changes back are just one election away,” he said.
The future of the CFPB is uncertain. The House of Representatives in Washington passed a law reforming the bureau, but it faces an uncertain fate in the Senate.
The Federal Trade Commission (FTC) was invigorated and funded specifically to oversee auto dealer issues by the Dodd-Frank Act, Charapp said. Hot button issues include advertising, spot delivery, F&I transactions and consumer privacy. A consent order entered by the FTC in March 2017 against a California new-car dealer group shows the agency’s aggressiveness.
Charapp reminded dealer attorneys that the FTC Used Car Rule is still very much in effect, albeit revised. As of Jan. 27, 2018, the revised Buyers Guide must be displayed on all used vehicles for retail sale.
The Internal Revenue Service (IRS) is putting a priority on enforcing the Cash Reporting Rule on IRS Form 8300, said Charapp. If a dealer receives cash of more than $10,000 in a transaction, or a series of related transactions, Form 8300 must be filed. The IRS is regularly auditing dealers for compliance with the Rule. A written program using a redundant system is critical.Download Bulletin PDF